Significant Digits

The significant figures (also called significant digits and abbreviated sig figs) of a measurment are those digits that carry meaning contributing to its accuracy (see entries for accuracy vs. precision). Generally this includes all digits except spurious digits introduced, for example, by calculations carried out to greater accuracy than that of the original data, or measurements reported to a greater precision than the equipment supports.

(thank you, wikipedia)

Maybe you remember learning about significant figures in high school. It seems a lot of us have forgotten this concept when it comes to financial planning so let’s dust off our 10th grade science books and think about how this applies.